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Digital Britain Summit BT chief executive Ian Livingstone defended his firm's limited plans for faster broadband today, arguing there is not enough demand for fibre to the home to justify its cost.

He was appearing on a panel with his opposite numbers at Virgin Media and O2 at the Digital Britain summit this morning.

"Of course a Ferrari is faster than a Ford," Livingstone said. "But most people are happy with a Ford."

BT has so far committed £1.5bn to roll fibre out as far as streetside cabinets, connecting about 40 per cent of premises by 2012. The upgrade will offer speeds of up to 40Mbit/s per second downstream, short of the more than 100Mbit/s fibre optic lines into homes and businesses could deliver.

Livingstone said there weren't enough applications that needed such speeds. "Ultimately it's about what people will pay for," he said. "The economic case is not great."

The panel were asked to debate whether the government should intervene either through regulation or subsidy to speed rollout of high speed broadband. Virgin Media chief executive Neil Berkett said that his firm's investment plans, along with those of BT, meant policy should focus on how to bring next generation access to rural areas where the return on investment would be poor.

"Digital Britain is about Digital Britain, not digital cities," he said.

The national cable network, which covers about half of UK premises, mostly in urban areas, is being upgraded to offer downstream speed of up to 50Mbit/s.

Business secretary Peter Mandelson, speaking after the panel, declined to rule out subsidies to ensure a universal fibre deployment. "I am a public investor where it's appropriate and right," he said. "I am not someone who believes... in replacing the private sector when they can do better."

The government has not announced any plans for public investment in next generation broadband infrastructure in rural areas. Mandelson said no decision has been taken, and would be "above my pay grade".

BT chief Livingstone said no matter how the next generation internet access market is delivered, infrastructure owners should be forced to allow rivals to offer services over the top. "What we cannot do in the UK is go back to monopoly," he said. "Imagine that coming from BT."

The Digital Britain summit was organised by the government at the British Library for technology and media executives to debate Lord Carter's wide-ranging report on the digital economy. A interim version was published in Janary, with final recommendations due in June. ®

Bootnote

Hats off to BBC man Nick Higham, who was acting as moderator for the panel. He drew a look that could curdle sheep's milk from Neil Berkett by asking the audience "you can tell he's Australian, can't you?"